Investments

Why and when to invest

Investing should be to meet your goals. Your planned expenditure and some emergency cash should always be ring-fenced so that investments don't need to be accessed.

In deciding whether and when you should invest we need to establish:

Your future plans

Your timescales

Your attitude to investment risk

How much accessible cash you should retain

Investment Risk

Risk and reward go hand in hand and you need to be comfortable with the level of fluctuation in capital values that might occur in your portfolio. We use various tools to assess and measure your risk tolerance and then talk about these with you so that you appreciate the range of possible outcomes from your portfolio over time. We also consider your capacity and need to take risk.

Risk has four primary aspects that are discussed when we sit down with you.

Risk perception generally relates to how much you know about investment markets and their tendency to follow a roller coaster path that is not always comfortable. We tend to be more afraid of things we know very little about. Those who have a good knowledge or understanding of financial markets tend to see them as less risky.

Risk tolerance expresses how you feel emotionally about taking risk. Where do you strike the balance between getting a favorable outcome versus an unfavorable one. Analysis suggest that risk tolerance slowly decreases with age.

Risk required is often overlooked and relates to the returns that you need to meet your objectives. The higher the return required the greater the risk that may have to be taken. On the other hand, you may choose to amend your future plans in line with your attitudes.

Risk capacity has to do with whether your financial situation can withstand the impact of a market decline without suffering an unacceptable loss of lifestyle now or in the future.

Asset Allocation

The most important aspect in determining how to invest to decide on the mix and proportion of equities (shares), fixed income securities (government and corporate bonds), cash, commercial property and other assets that will be held. Academic research suggests that this process, called 'asset allocation', is the key to successful investing and that stock picking and trying to time the market are much less relevant in the longer.

In the short term, external events can impact on investor behaviour and market efficiency, making a person act and react in unpredictable ways. This is why we view investing as panning periods of no less than five years and preferably much longer. We usually advocate high cash holdings outside clients' investment portfolios to give liquidity and the capacity to ride our market highs and lows.

We believe that for investors the most important decision concerns the mix of holdings in the portfolio rather than focusing on the individual holdings themselves. To work out what is best for you we consider factors such as your financial needs and objectives, your overall resources, your attitudes to risk and for how long you want to invest. By working with you and understanding your feelings about investments, together we compile a portfolio with which you are comfortable and will not give you sleepless nights.

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The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.

All investments involve a degree of risk of some kind. This section describes some of the risks which could be relevant to the services we provide to you. We may provide further risk information during the course of our services to you, as appropriate.

Our services relate to certain investments whose prices are dependent on fluctuations in the financial markets outside our control. Investments and the income from them may go down as well as up and you may get back less than the amount you invested. Past performance is not a guide to future performance.